Koenig has alleged facts sufficient to excuse his failure to exhaust
administrative remedies. Section 12 of the SERP specifies the procedures
for disputed claims. Notably, disputes were handled by the Compensation
and Stock Options Committee of Old Waste's Board of Directors. But, by
the time Koenig received notice that his SERP benefits had been directed
to an escrow account, that Committee had ceased to exist. Neither Old nor
New Waste appointed a successor to the Compensation and Stock Options
Committee that would be responsible for coordinating claims procedures
subsequent to the completed merger. Thus, Koenig could not challenge New
Waste's decisions to direct his SERP benefits into the escrow account:
the entity charged with hearing such a claim no longer existed. See Satus
v. GTE Directories Serv. Corp., 104 F.3d 131, 138-39 (7th Cir. 1997) (a
court must consider all avenues available to the plan participant). At
this stage of the proceedings, Koenig has adequately demonstrated that
meaningful access to review was, severely curtailed. See Wilczynski v.
Lumbermens Mut. Cas. Co., 93 F.3d 397, 402-403 (7th Cir. 1996) (a court
cannot dismiss a complaint that sufficiently alleges the denial of
meaningful access to administrative review). As such, we need not
consider whether Koenig's pursuit of administrative remedies would have
been futile. New Waste's motion to dismiss the complaint in its entirely
based on Koenig's failure to invoke his administrative remedies is
denied.

C. Breach of Contract (Section 13 of the SERP)

Section 13 of the SERP ("Amendment and Termination" provision) states:

The Plan may be amended. . . . However, no such
action shall without the consent of the
Participant, reduce or impair the benefits then
currently payable to a participant or surviving
spouse, nor divest a Participant of any benefits
such participant would have been entitled to receive
had such Participant resigned from the Company's
employ immediately before the effective date of the
amendment termination.

(R. 11, Pl.'s Am.Compl., Ex. A, SERP at Section 13 (emphasis added).)
Koenig alleges that the First Amendment violates Section 13 of the SERP
because the First Amendment's escrow "account provision constitutes a
reduction or impairment in benefits. As such, he argues, its adoption
required Koenig's consent' under Section 13.

New Waste responds that directing Koenig's benefits to an
interest-bearing escrow account, while delaying payment, in no way
reduces or impairs Koenig's benefits. Alternatively, New Waste asserts
that the language "then currently payable" in Section 13 is fatal to
Koenig's claim because at the time of the First Amendment, and
immediately prior to the plan's termination, Koenig was entitled to a
lump sum payment under the SERP.

To assess whether Koenig has stated a claim upon which relief could be
granted, we must address two questions. First, at the time of the First
Amendment, was Koenig entitled to any benefits under the SERP? Second, if
Koenig was entitled to benefits at that time, did the First Amendment
reduce or impair his vested benefits in violation of Section 13?

Usually, top hat plan participants are high-level executive employees
who "retain sufficient bargaining power to negotiate particular terms and
rights under the plan and therefore do not need ERISA's substantive
rights and protections." Kemmerer, 70 F.3d at 288. That being said, "it
would be absurd to deny such individuals the ability to enforce the terms
of their plans." Id. (internal quotations omitted). Such "a denial would
likely render top hat plan participants unable to negotiate much more
than illusory promises. Id. Federal courts thus treat top hat plans as
unilateral contracts, which create a vested right in those employees who
fulfill the plan's requirements. Id. at 287; see also In re New Valley
Corp., 89 F.3d at 150-51 ("Under unilateral contract principles, once the
employee performs, the offer becomes irrevocable, the contract is
completed, and the employer is required to comply with its side of the
bargain.").

In the present case, the SERP was a contract between Koenig and Old
Waste. Under its terms, Koenig qualified for SERP benefits because his
grade of employment was Level F or higher, and he had completed at least
10 years of service for the company. Thus, Koenig's benefits had fully
vested prior to the First Amendment.

New Waste notes the apparent inconsistency regarding the fact that
Koenig relies on the First Amendment to argue that he is entitled to a
lump sum payment, while challenging the escrow account provision within
the same amendment. Contrary to New Waste's assertion, there is no
inconsistency. Koenig explicitly challenges the escrow provision
because, he argues, it reduces or impairs his SERP benefits and thus
requires his consent. The provision creating lump sum payments does not
suffer from a similar defect.

New Waste also asserts that all participants' SERP benefits were
subject to forfeiture if they engaged in "willful malfeasance" or "gross
negligence," as specified by SERP Section 9. Old Waste's Board of
Directors clearly had the authority to make a finding of gross negligence
or willful malfeasance. But neither Old Waste nor New Waste ever
determined that Koerig engaged in either activity. Instead, New Waste's
Board of Directors pursued an alternative strategy by enacting the "First
Amendment and authorizing the Board of Directors to direct funds into an
interest-bearing escrow account pending an investigation by the Audit
Committee. The critical inquiry is whether the First Amendment's escrow
provision "reduced" or "impaired" Koenig's benefits in contravention of
the SERP Section 13, which expressly prohibits such amendments.

2. Did the First Amendment reduce or impair SEEP benefits then
currently payable to Koenig?

In response, New Waste argues that the escrow account provision "only
applies to an interest in or right to receive SERP benefits," and
therefore does not violate the SERP's spendthrift provision. (R. 14,
Defs.' Mot. to Dismiss at 22.) New Waste asserts that the issue before
the Court is "whether Mr. Koenig was entitled to SERP benefits in the
first instance." (Id. at 23.) As explained above, top hat plans are
treated as unilateral contracts accepted by performance. Thus, Koenig has
stated a claim that his benefits had vested and were protected by the
SERP's spendthrift provision. See In re New Valley, 89 F.3d at 150-51.
Consequently, New Waste's motion to dismiss Count II is denied.

E. Estoppel

Koenig next argues that New Waste is estopped from withholding his SERP
benefits due to statements printed in both the Prospectus/Joint Proxy
Statement and the Merger Agreement that preceded the merger between Old
Waste and USA. Here, Koenig alleges that the Proxy Statement/Prospectus
was misleading in stating:

The current or former executive officers who are
participants in the SERP will receive service credit
for additional years of service over their severance
periods . . . and become vested in any benefits
accrued thereunder. Additionally, the Merger
Agreement provides that the SERP will be terminated
at or prior to the closing of the Merger and all
accrued benefits will be paid to participants in a
lump sum.

In the present case, Koenig has adequately pled a written, knowing
misrepresentation. Koenig alleges that the Proxy Statement/Prospectus
misleadingly stated that he was an eligible SERP recipient and thus would
receive a lump sum payment upon the effective date of the merger.*fn3
Obviously, Koenig never received such a payment.

New Waste argues that the statements on which Koenig relies concerned
"potential" benefits that "may be paid, vested or accelerated as a result
of the merger." (R. 11, Pl.'s Am.Compl., Ex. D, Joint Proxy Statement at
47 (emphasis added).) However, a "plan should be construed as a whole,
and the specific language of each provision should be interpreted in the
context of the whole." Carr v. First Nationwide Bank, 816 F. Supp. 1476,
1493 (N.D.Cal. 1993). The statement that SERP benefits "may be paid,
vested or accelerated as a result of the Merger" anticipates that payment
is contingent upon the final merger between Old Waste and USA. Once that
event occurred, SERP beneficiaries should have received lump sum payments
of their benefits.

New Waste also relies on a footnote in the Joint Proxy Statement, which
states that information in the statement "may be subject to change." (R.
14, Defs.' Mot. to Dismiss at 25 (emphasis in original).) However, the
words "which may be subject to change" clearly refer to the actuarial
assumptions used to calculate SERP benefits and not to the fact that Old
Waste executives would receive lump sum payments. Consequently, Koenig
has adequately pled a knowing, written misrepresentation.

Next, Koenig alleges that he relied on New Waste's misrepresentations.
Specifically, Koenig alleges that he executed financial planning decisions
based upon information contained in both the Joint Proxy Statement and
Merger Agreement. Koenig also adequately alleges that his reliance was
detrimental. The Amended Complaint specifically states he "has been
damaged by [D]efendants' conduct." (R. ii, Pl.'s Am.Compl. ¶ 62.)
Koenig has adequately alleged an estoppel claim, and New Waste's motion
to dismiss is denied.

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